In the report tabled in Parliament last week, Confronting Complexity: Reforming Corporations and Financial Services Legislation, the Australian Law Reform Commission (ALRC) called the current state of financial services regulation as being like “porridge”, “tortuous”, treacherous”, and “labyrinthine”.
In response, the Governance Institute of Australia has pushed for the establishment of an expert, consultative, and independent body to advise on market law reform and corporate legal policy issues.
The body, as envisioned by the Governance Institute, would be similar to the Companies and Securities Law Review Committee, which was abolished in 2018.
Governance Institute of Australia chief executive Megan Motto said Australia requires an efficient, nimble, and independent corporate and securities law reform body given the rapidly changing nature of the corporate, financial. and securities sector.
“Australia can no longer afford to take a reactive corporate law reform approach based on complaints from specialist interest groups proposing ad-hoc law reforms,” Ms Motto said.
“Recent law reform proposals are often driven by ministerial-led directions rather than from detailed policy development. This top-down process does not meet the needs of modern corporate law frameworks as the scope of reform is narrowed and focused on specific issues.”
Among the benefits of establishing this kind of independent body, she said, would be the ability to deliver holistic structural reform proposals that would help drive productivity and support economic growth, job creation, and living standards.
“This is necessary at a time when dynamic industry forces are shaping the future of the economy and productivity growth continues to lag behind historical averages,” Ms Motto said.
“There has been no large-scale structural reform in corporate law since the implementation of the Corporations Act 2001 more than 20 years ago. Since then, we’ve seen the emergence of fintech innovation, volatility in cryptocurrency, and increasingly sophisticated financial crime networks.”
Ms Motto said it has become increasingly complex and expensive to engage with the Corporations Act, which is no longer fit for purpose, particularly for many small and medium sized corporate entities.
“Reform is crucial in order to keep pace with international peers and attract global business investment that will deliver jobs and growth to Australia.”
